Budget falls short of electronic product makers' expectations

MAIT has been recommending that there is a real opportunity to grow the PC manufacturing ecosystem in India leading to increased job creation and impact. “By not extending the support for local manufacturing to these segments, we are missing an opportunity for creating a robust electronics manufacturing ecosystem,” opined Ghosh.

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The industry was very hopeful that the government would extend duty differential scheme to PC, laptop, servers and also cover more critical customer premise equipment (CPE) products such as switches etc as it would have encouraged manufacturing in a big way and would have also created a manufacturing value chain in the country.

“The domestic value addition of around 20 to 30 percent on bill of material would have been feasible and would have also helped in creating a good export potential from India to be aligned with 'net zero import' strategy of government and we will continue to impress upon MEIT, MOF and other authorities on this,” noted Nitin Kunkolienker, vice president, MAIT and director - corporate affairs, Smartlink Network Systems. 

Noting that the budget does not have solid impetus for Make in India, B S Sethia, past president of Electronic Industries Association Of India (Elcina), said, “Domestic value added manufacturing is not supported by the budget and it will encourage imports especially of PoS (point-of-sale) machines, micro ATMs and scanners to promote cashless economy as all duties including BCD (basic customs duty), CVD (countervailing duty) and SAD (special additional duty) have been waived. The industry had recommended differential duty or imposition of BCD on the finished products to give an immediate boost to their assembly. Waiver of all duties will result in a flood of imports without enabling creation of a local industry and a big opportunity for manufacturing these products in the country would be lost.”

In case of LED lights, fixtures and LED drivers and its parts, budget has prescribed BCD at 5 percent and CVD/excise at 6 percent. Domestic players feel that the move will lead to flooding of imported products. “Almost all mechanical and electromechanical parts as well as LED drivers for LED lights are manufactured in India in good numbers and were subject to 10 percent BCD. Reduction of BCD to 5 percent on these would result in raising imports of these parts,” said Rajoo Goel, secretary general, Elcina.

“Further inputs of LED drivers have been brought under 5 percent BCD though presently these are at zero BCD as all are ITA bound. While this could help in enhancing local sourcing of components such as capacitors, resistors, PCBs and connectors but imports are likely to happen without actual user condition to avoid the 5 percent BCD. The objective of greater local value addition and local sourcing of inputs for drivers would thus be obviated,” added Goel.